The United States and the Global Metals Trade

Last week, global and national markets were shaken by President Trump’s announcement of his administration’s intention to impose a 25% tariff on steel imports and a 10% tariff on aluminum imports into the United States. Even though these new taxes and restrictions have not been made official yet, President Trump is already getting push back from both Democrats and Republicans in Congress. Likewise, other countries and jurisdictions throughout the world, such as Canada, the European Union, and Mexico, have already announced that they would respond in kind and reciprocate such trade restrictions.

Today, the United States is the world’s largest steel importer with a total of almost 27 million metric tons or approximately US$29 billion imported during 2017. Furthermore, the main international suppliers of steel to the United States are Canada, Brazil, South Korea, Mexico, Russia, Turkey, Japan, Germany, Taiwan, and India, which supply about 30% of the US national demand for steel. Similarly, the main suppliers of aluminum are Canada, Russia, China, the United Arab Emirates (UAE), Bahrain, Germany, Argentina, Qatar, France, and Mexico.

The United States and the Global Metals Trade

In terms of output, the largest global producers of steel are China, Russia, the United States, Japan, India, and South Korea. Specifically, coated flat-rolled iron, which is one of the main types of steel, is the 72nd most traded product worldwide. During 2016, global producers exported US$37.8 billion worth of coated flat-rolled iron, while global consumers imported US$33.5 billion. That year, the leading suppliers of coated flat-rolled iron were China, representing 28% or US$10.4 billion of global exports; South Korea, accounting for 13% or US$5 billion worth of international exports; and Belgium, totaling 7.4% or US$2.8 billion. Simultaneously, the world’s leading importers of coated flat-rolled iron in 2016 were the United States, representing 9.5% or US$3.2 billion worth of global purchases; Germany, totaling 7.8% or US$2.6 billion of global imports; and China, accounting for 6.1% or US$2.1 billion.

Another major steel product is hot-rolled iron, which represents the 91st most traded product in the world. During 2016, global producers of hot-rolled iron exported US$30.8 billion worth of this product, while global consumers imported US$31.9 billion. That same year, the leading suppliers of hot-rolled iron were Japan, representing 20% or US$6.1 billion of global exports; South Korea, accounting for 14% or US$4.2 billion worth of international exports; and Russia, totaling 7.8% or US$2.4 billion. Furthermore, the world’s leading importers of hot-rolled iron in 2016 were South Korea, representing 8.6% or US$2.7 billion worth of global purchases; Italy, totaling 7.8% or US$2.5 billion of global imports; and the United States, accounting for 7.2% or US$2.3 billion.

It remains to be seen whether President Trump will indeed implement the abovementioned tariffs on metallic imports during the coming week. Likewise, the potential economic effects of these tariffs on the United States’ economy is being fiercely debated, particularly as compared to similar tariffs imposed back in 2002 by then-President George W. Bush.

(Read more about Russian Economics and Agribusiness in 2018)